- EUR / JPY bullish momentum stopped near 133.50.
- The yen regains traction as US yields decline.
- Initial US claims increased by 290,000, Philadelphia Fed index disappointing.
The recovery of the Japanese yen motivates the strong rebound of the EUR/JPY to enter a pause mode after hitting new highs in the 133.50 area on Wednesday.
EUR / JPY moves away from 4-month highs
Despite the ongoing corrective pullback, the EUR / JPY manages to hold onto positive territory for the third week in a row and loses ground for the first time after ten consecutive daily gains. In addition, the crossing has almost completely reversed the fall from January to August.
In fact, yields on the key benchmark US 10-year bond and the long end of the curve are retracing from recent highs, prompting the Japanese yen to regain some lost ground against its US counterpart. Meanwhile, yields at the end of the curve reverse two daily declines and return to the 0.40% level.
On the agenda, weekly US claims rose 290,000 in the week to October 16, while the Philadelphia Fed index disappointed expectations with 23.8 for the current month.
Technical levels
So far, the cross is losing 0.51% at 132.44 and a breakout of 133.48 (October 20 monthly high) would expose 133.76 (June 10 high) and then 134.12 (June 1, 2021 high). On the downside, the next support comes at 131.85 (10-day SMA) followed by 131.02 (Fibonacci level) and finally 130.38 (100-day SMA).
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